How are energy investors positioned?
Wednesday
The RBCCM Global Technology, Media, Telecom (BCBA:TECO2m) & Internet (TIMT) team has identified a selection of top stock picks they consider to have durable sales growth and present a compelling buying opportunity following the recent market downturn. The S&P 500 has fallen approximately 9% from its February 19 peak, prompting the TIMT team to spotlight stocks they believe are undervalued and poised for recovery.
ServiceNow (NYSE:NOW), highlighted by the team, has seen its shares drop around 30% from its January 28 all-time high. Despite concerns about its agentic AI pricing and packaging strategy and the potential impact of reduced demand for its services, the RBCCM team views the current share price as an attractive long-term entry point. They note ServiceNow’s solid organic growth and high free cash flow margins. The company’s Knowledge conference, scheduled for May 6-8, is anticipated to provide further insights into its strategies.
HubSpot (NYSE:HUBS) has also been marked by RBCCM as a stock with buying potential, with its shares down significantly from February and year-to-date. The firm sees HubSpot’s recent improvement in net retention rates and the adoption of a seat-based pricing model as positive indicators of future performance. The company’s move towards multi-hub adoption and GenAI products could drive further growth, along with potential for strong profitability in the future.
Carvana (NYSE:CVNA) remains a top pick for RBCCM, with the belief that the company’s inventory ramp-up will lead to upward revisions in retail unit estimates. Currently trading at $89.38 with a market cap of $7.96 billion, the company has demonstrated strong revenue growth of 29.86% over the last twelve months. According to InvestingPro data, analyst price targets range from $100 to $154, suggesting potential upside. Despite a year-to-date share price decline, the firm maintains its positive stance from their January 6 upgrade, citing potential for improved profitability and persistent supply constraints as opportunities for Carvana to leverage its business model. InvestingPro analysis indicates the stock is currently in oversold territory, with a GOOD overall financial health score.
The TIMT team’s focus on these companies stems from their belief in strong management teams, limited risk of downward estimate revisions, and potential catalysts beyond earnings. With the current market volatility and potential for further near-term downside, the team underscores their conviction in these stocks to outperform their peers in the coming weeks and months. For comprehensive analysis of these and other stocks, including detailed Pro Research Reports with intuitive visuals and expert insights, visit InvestingPro.
In other recent news, Shift4 Payments has made headlines with its strategic acquisition of Global Blue for an enterprise value of $2.5 billion. This move is anticipated to significantly enhance Shift4’s presence in the global payment market, particularly in the Asia-Pacific region, and is expected to contribute substantially to the company’s adjusted EBITDA in the coming years. RBC Capital Markets has maintained an Outperform rating with a $154 price target, highlighting the acquisition as a catalyst for growth in the retail sector. DA Davidson has also reaffirmed a Buy rating, although they have adjusted their price target to $124 due to potential integration challenges and financial leverage concerns.
Keefe, Bruyette & Woods increased their price target to $125, citing strong growth drivers and a positive outlook following Shift4’s recent Investor Day. The firm noted that the company’s strategic initiatives, including cross-selling and international expansion, are key factors in their optimistic assessment. Shift4 Payments’ management expressed confidence in achieving high teens organic growth over the next three years, with potential acceleration from recent acquisitions. Despite slightly conservative projections for 2025, the company’s robust fourth-quarter earnings have reinforced positive sentiment among analysts. As Shift4 integrates Global Blue, investors will be closely monitoring the company’s performance and strategic execution.
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